A day that highlights world financial giant Citigroup's layoff of about ten percent of its workforce is a somewhat odd time to be running a profile of Thomson Reuters, but The New York Times has done just that. The article is entitled "The New Fight for Financial News," but of course the battle between Bloomberg and its perennial rivals now combined into a single company is fought on may levels well beyond the news front. Thomson Reuters CEO Tom Glocer likens Bloomberg in the article to the equivalent of Richard Branson's Virgin Atlantic airline shaking up the marketplace for transatlantic flights in the 1990s, an apt analogy on at least two levels. It's apt in the sense that Bloomberg forced its competition into many radical and painful changes to keep up with its growing market share - the new combined Thomson Reuters entity is just about toe-to-toe with Bloomberg for its piece of the financial information marketplace - but also apt in the sense that there's a new generation of competition that's putting both the financial information marketplace and the airlines on alert.

That new generation is not necessarily of the same type and heritage as either Thomson Reuters or Bloomberg. What impressed me most at the recent SIFMA conference and expo in New York was how the traditional financial information vendors are receding into the background as the technologists are coming to the fore. The exhibition floors were chockablock with networking technologies this year, both for low-latency automated trading services and for more general information and trade execution network services from vendors such as BT Radianz. Cloud computing was also on display at the SIFMA show from Salesforce.com, with a more aggressive and extensive display of its capabilities to support brokerage marketing operations. Also noteworthy was SDS Financial Technologies' moves to support more automated crossing networks for commodities and futures trading, helping to reduce execution costs and liquidity problems for a marketplace still tied to many face-to-face trading pits.

So while companies like Thomson Reuters and Bloomberg are going to continue to try to dominate on the desktops of investment bankers and portfolio managers for the foreseeable future, a lot of the action in financial information is taking place well away from the desktop and in the bowels of computer networks that support securities trading and sales. Not all of these stories are about the dominance of the Web as the cloud of choice - the financial marketplace has many specialized networks that support its sophisticated information-driven marketplaces - but certainly the concept of cloud computing popularized by the Web in which desktop technology is just an interface to sophisticated services from potentially any network providing information and execution services. Certainly the robust trading floor technologies developed in the past few decades will continue to be a part of this mix but with today's cutbacks by Citigroup serves as a reminder that we may be nearing the end of the era of big investment bank trading floors as the driver for measuring the success of financial information services.

With more and more workflows in securities trading having become fully automated in recent years it's not clear that the desktop-oriented services of companies like Thomson Reuters and Bloomberg are going to work out in the long run for high-growth information services. Instead, it's far more likely that more and more network-oriented "cloud computing" services are going to subsume more and more profitable parts of securities transaction support while information suppliers find an increasingly narrow range of clientele ready to spend handsomely on major desktop integration services. While the hedge fund trading of recent years hit speed bumps in recent months much as programmed trading caused hiccups in the 1987 crash, the ability of a small team of hedge fund managers to build dominant positions in a marketplace by mining information aggressively from alternative information sources not provided by traditional vendors should be a wakeup call to Thomson Reuters and Bloomberg that anyone can extract useful content from any cloud very quickly and effectively.

Major financial information vendors have had similar challenges in the past and have responded with valuable services to rebuild their position in the marketplace, but it's not clear to me that we're on another full-blown cycle towards that goal right now. I think that we're more likely to see cloud computing services gaining more and more power as they provide well-integrated information services to ever more concentrated and sophistated trading operations. I don't think that this means that Lehman Brothers will be moving back to its old South William Street HQ any time soon (now a cozy inn) but I think that we will be seeing the financial information industry looking more like it did in the 1950s than it did in the 1990s over the next ten years - with fewer and fewer direct product presences on trading floors and more and more integration into cloud computing services. There are opportunities there for Thomson Reuters and Bloomberg as well, of course, but perhaps not the types of opportunities that are driving their organizations today. In the meantime, congratulations to Tom for a great profile article.

Labels: Bloomberg, cloud computing, financial information, Salesforce.com, thomson reuters, tom glocer

As a company that has as its tagline "Where Content, Technology and People Meet" Shore can only applaud the SIIA's decision to combine sessions for software and content professionals at its annual West Coast conference into one event this year, now dubbed NetGain. Seeing companies like Salesforce.com and Deloitte Consulting in one set of rooms and companies like LexisNexis and Wolters Kluwer in another room at this conference always seemed like a huge lost opportunity, only the moreso as Software as a Service begins to transform the face of enterprise I.T. services and content providers move more towards workflow applications and content integration technologies to build their market value. At the same time services like Google have long demonstrated that a technology that provides highly valuable context for content can be a publishing platform unto itself. So in many ways the software industry and the content industry are chasing the same high-value market opportunities and need to recognize that they have to speak in the same forums together for enterprise markets as much as for media markets.

I did not live-blog this conference, in part to participate in the SIIA's experiment in using Twitter to cover the event (see LiveTwitter's events page and look for NetGain updates). Larry Schwartz, President of Newstex, LLC, provided a consolidated collection of people's Twitter messages here for those wanting a more blow-by-blow account of the proceedings. I also posted earlier a piece reviewing presentations by Salesforce.com and Google that underscored the importance of "cloud computing" in delivering enterprise content services.

On one level NetGain was such a perfectly natural blend of conference attendees from the SIIA Content and Software divisions that one wonders why this wasn't done earlier. This was underscored by the similar product themes brought out in the conference sessions. When software providers talked about "Software as a Service," what it really seems to say in many ways is that software companies are not succeeding as much as they used to simply by licensing their software as intellectual property and need to adopt licensing models more akin to those used for many years by enterprise subscription database services. When content providers talked about the importance of "workflow applications," What they seemed to be saying was that they cannot survive just on licensing intellectual property that gets commoditized unless it's put to work through really useful software services. Either way both software publishers and content publishers are chasing the same value proposition in the enterprise increasingly.

And for that matter, how different is "cloud computing" from the decades-old content services provided in the financial services industry by securities exchanges and companies like Thomson Reuters and Bloomberg? Certainly the Web has accelerated the development of client-server content services beyond any scale of earlier enterprise services but at the end of the day software and content services have been in a merging industry for a long time. Alacra, which won a CODiE award at NetGain for its ability to integrate content into enterprise workflows, has been working diligently for more than a decade on its powerful AlacraBook content integration services. Eventually trends catch up with long-established realities, I suppose.

The big difference today seems to be the influence of the one key ingredient that was somewhat under-represented at NetGain: social media services. Clay Shirky delivered his usual great speech about how social media services are revolutionizing publishing and ecommerce and there was a very good panel discussion lead by Dave McClure, but the increasing preponderance of social media publishing services both outside and inside major enterprises just didn't seem to register with most of the NetGain attendees. We're moving rapidly towards a predominant publishing environment in which the audience is seeking out and defining the value that it needs from content far more rapidly than traditional I.T. and publishing services are defining it.

This raises the question: what is the platform for today's and tomorrow's publishers? Certainly Salesforce.com and Google, along with other presenters, raised a compelling case for the applications programming interface, or API, being the platform of choice for the forseeable future. Being able to plug in content and functionality into one or more platforms via APIs enables people with both content and technology services to put their capabilities into the contexts that audiences value most very rapidly. Certainly the flourishing success of Facebook's APIs has helped to fuel its growth even as Google's OpenSocial API promises to bring content into social media contexts more universally. If a platform does not have the ability for content and functionality to grow through the efforts of third parties then it's going to be hard to fuel growth efficiently.

But the real platform of today and tomorrow is the community built around a platform. Bloomberg and Reuters proved this out years ago as their messaging and conversational dealing services enabled securities market traders to communicate with one another more efficiently and to contribute valuable content that resulted in the execution of securities trades. While much of the financial industry's technology and content services have shifted towards more automated functionality, the heart of what provides the firms using these services with a market advantage is the ability of people to collaborate in marketplaces through publishing. Today a new generation of business information services is emerging, highlighted at NetGain by Hoover's and ECNext, both of which are focusing on how to lock in content value through their audiences providing valuable content in the context of their platforms. A publishing community is a community that can become the heart of any platform's value. Looking at how Salesforce.com itself is moving towards integrating social media functionality this concept is hardly a secret.

There were also a lot of interesting exhibits by CODiE candidates at NetGain, which allowed people to get more "hands on" with their products before voting - sometimes literally. I especially enjoyed J.J. Keller's Safe.Sim truck driving simulator, which although it did not win in its CODiE category was both a very powerful training and evaluation tool as well as a "sleeper" software hit. With a little bit of repackaging and some consumer marketing know-how this could be a huge software hit. Truckers and truck fans around the nation and no doubt worldwide would jump at the opportunity to have a multi-player online version of this, complete with their own customizations. As for me, well, I guess I have a few things to learn about backing a semi into a loading dock.

In the paid exhibitors area I was especially impressed by a couple of offerings. Mzinga is an OEM social media community development service for both enterprise and consumer markets, enabling the collection and sharing of valuable content that builds value inside and outside the firewall. Well worth a look if you're considering stepping into social media more deeply. Vitrium Systems enables PDFs to be turned into intelligent content payloads that track audience behavior without requiring plug-ins or downloads and can also provide DRM for PDF content. For those still emphasizing print-formatted content this is an interesting play, especially for those interested in getting more play out if eBook content.

On the SIIA Previews agenda two later presentations stood out clearly. Watch Zuora, a company that promises to enable subscription models for practically everything, including content and technology to be sure but also just about any business model for any fungible product or service. Model-wise I think that they're on to something big and I plan to highlight them in future writings. It's a spinoff of ideas from Salesforce.com using telecommunications technology, Keep an eye on this one, it may take a while to take off but I think that it has the potential to hockey-stick.

Another strong Previews offering was SlideRocket, which combines powerful presentation tools, graphics development and community content to create a new way to develop and share presentations that can capture metrics on how people look at them. I think of it being to tools like PowerPoint and Photoshop and Flash what Salesforce.com and Facebook were to enterprise software and online publishing - services that defined their own categories as a new kind of publishing and in the process of doing so redefined several market segments at once by focusing on owning user content. I can't wait to get my hands on the beta.

So it was a great event, though I would hope that next year we get to see more participation both by more West Coast local firms and more major East Coast and overseas publishers. I would say that the only real disappointment that I had from the event was the rather quiet audience, which seemed in many instances to be of the opinion that while things were changing rapidly in the publishing and software industries the changes that many tout as revolutionary are not going to sweep away long-standing business models any time soon. There's more than a small grain of truth in that outlook, of course. Yet looking at the news industry, now reeling from the effects of having largely ignored the need to transform themselves radically in the face of a decade of online publishing, I think that it's safe to say that NetGain represented in many ways the admission that later is sooner than many may think.

Labels: 2008, events, Google, J.J. Keller, livetwitter, Mzinga, Salesforce.com, SIIA NetGain, SlideRocket, Twitter

At the SIIA NetGain conference in San Francisco George Hu, EVP of SalesForce.com Products and Marketing, gave both a great summary of their product philosophy and a demonstration of their Force.com integration with Google Apps. Nothing terribly new in all of this, but what struck me more strongly than ever was how both their philosophy and their product development parallels and integrates with Google. George mentioned conversations with Google CEO Eric Schmidt which indicate that they are aligned on far more than just the product level. It would be foolish of me to speculate on a potential acquisition of SFDC based on George's comments, but the more that SFDC develops as a market presence the more that it seems that it is repeating the Google business model for enterprise content services (also known as Software as a Service, or SaaS).

First and foremost, SFDC built a highly scalable architecture that would allow for multi-tenant hosting, a very geekish way of saying that they have a server farm that has common management of SFDC software for thousands of companies' protected data sets. This is not so different from Google's commitment to creating a highly scalable common search service for its online audience, instead of trying to use online search services as a way to sell software and hardware (does anyone remember AltaVista?). Making your services highly scalable as one of your primary proprietary advantages gives SFDC enormous power to become a defacto content services platform much in the same way that Google's power to crawl effectively gave it a key market advantage.

Instead of having to sell copies of this capability, like Google SFDC focuses on content services. Yes, we call them applications in many instances, but the net focus of these applications is to enable people to consume or publish content. Enterprise publishers talk about enabling workflows as a premium content service: there's no real difference between what SFDC is doing and what publishers are attempting, other than the desire of publishers to promote their own proprietary content. Add in SFDC's integration with Google Apps, including Gmail for email services, and you have an "80 percent solution" for enterprise workflows similar in scope and impact to Google's 80 percent solution for search. Yes, we still have many high-quality search engines for enterprises, just as there will continue to be many other high-value I.T. products in enterprises, but as a percentage of I.T. expenditures they are certain to dwindle as content services enabled via the Internet "cloud."

The similarity of Salesforce.com's marketing model was underscored by a presentation at NetGain from Google's Matthew Glotzbach, Product Management Director for Google Enterprise. Matthew highlighted in a simple graph how in enterprises the mediation of I.T. departments and other business functions in the purchasing of content and technology services from vendors is different from the consumer model, in which people can access and select services from any number of vendors without intermediation - creating more effective competition and, ultimately, coopetition between vendors. Security, data privacy are always touted as barriers to a transition to more consumer-like access to enterprise content but increasingly with the theft of laptop computers in airports, offices and just about anywhere it's not clear that a mobile-enabled workforce is going to be served well by anything but highly scaled cloud infrastructure.

Long story short, we are well on the way to the Google-ization of both enterprise content companies and enterprise I.T. companies by Salesforce.com in combination with Google, with Google Apps acting as the "glue" between the two parallel clouds. While there will always be other clouds out there for specialized purposes - you won't see low-latency securities trading networks on SFDC any time soon, for example - I think that what we're seeing is the content/applications cloud enabled by Salesforce.com as the emerging de facto environment for delivering content and technology services for much of today's corporate environment.
In the process of becoming that de facto platform, the ability of small and medium sized businesses to scale themselves rapidly and effectively will change the competitive landscape in business quite rapidly on a global basis. About the only real difference between Google's dominance and SFDC's probable dominance is that one did it on ad revenues and the other on subscription revenues. I.T. vendors and content vendors looking at the SaaS space need to move far more rapidly to build effective cloud-based products and services - and to recognize that a winning strategy includes owning the cloud sometimes and sometimes playing in other people's clouds. I hope that's not too cloudy to you, if it is, give a holler.

Labels: 2008, Google, Salesforce.com, SIIA NetGain

Given that LinkedIn's professional social network content has been available through SalesForce.com's AppExchange service for nearly six months is it really a big deal that there's now a Facebook interface as well? As seen in Programmable Web's flash demo it's a fairly rudimentary integration: if you add a contact you can select their Facebook profile for inclusion in your SFDC desktop and use many of Facebook's functions and applications to communicate with people in their social networks. That's hardly rocket science but it's an excellent indication of the strengths that can be gained from using a social networking content service as a drop-in module in a software-as-a-service desktop environment.

Most importantly, though, it's an indication of how quickly two content services can benefit from one another's mutual presence in SaaS very rapidly with virtually no integration requirements. Instead of trying to reinvent the wheel with social networking SalesForce.com enables its clients to tap into the networks that matter most to their sales efforts. With Facebook's more multi-dimensional view of people's personal and professional lives it's possible that sales professionals will get a different kind of introduction than one might get from a LinkedIn referral. LinkedIn provides excellent professionally-oriented networking tools but there's something about telling someone, "Hey, I saw your profile on Facebook, I see that you're into sailing" that's a little more personal and conversational. Moreover it's a window through Facebook's programming interface into functionality that they have on their own platform that in essence gives one embedded applications within an application that's embedded in a SaaS platform. That's powerful content integration that can work to extend the value of both the hosting platform and the embedded platform as valuable contexts for content very rapidly.

While Facebook is having its ups and downs in terms of traffic, personal content exposure issues and integration complaints the growth of its use in professional circles over the past several months has been extraordinary. Although it's mostly a few brave people that venture beyond the basics of Facebooking, professionals are becoming much more used to the idea that their professional lives count increasingly on their ability to project their value and depth as a multi-dimensional person, rather than just a set of skills that can be marketed as useful but disposable labor. The old adage "it's not what you know but who you know" is taking on a new twist as online networking creates a new hook into effective business relationships.

At the same time most business information companies are standing still in comparison to companies like Salesforce.com and Facebook when it comes to encouraging on-the-fly content integration with their products. With a strong focus on traditional integration of content into structured databases the opportunity to provide a looser level of integration into a workflow-centric platform. There are strong opportunities for such integration in major market verticals, so expect this to happen over time. But with Salesforce.com pushing its Force.com initiative to provide "platforms as a service" for various corporate functions the time to move on such initiatives is now, not later. We may not be seeing Facebook as a networking tool on Bloombergs any time soon but there are plenty of markets where such rapid content integrations will benefit companies trying to put content in the most valuable context possible.

Labels: Business Information, facebook, integration, mashups, SaaS, Salesforce.com, Social Media

On one level the news from WaPo and others that Salesforce.com is discussing an alliance with Google to integrate Google's office applications, messaging and other key components into their offerings has to be welcomed at business information providers' offices. Many business information services companies are already taking advantage of Salesforce.com's AppExchange service to integrate their content and functional capabilities into SF.com's increasingly popular sales and marketing platform, so SF.com's success will help to enhance their successes as well through on-demand content services sales. But this development must be absorbed along with the announcement of SF.com's launch of a venture funding network to accelerate the development of business information services through their platform. Put the two of these together and you can see a perfect storm brewing for business information providers that have assumed that their investments in enterprise software to drive content sales will flourish indefinitely.

Why be worried about SF.com and Google? The key factor is that bit by bit the enterprise's information base is being absorbed into proprietary Web databases. That's likely to turn out to be a good thing for many enterprises trying to compete in a cost-conscious global environment: the "pretty good" infrastructure of SF.com is increasingly more than just adequate to perform crucial tasks, especially when extended by third party services through SF.com's AppExchange services. Add in the "pretty good" Google office automation services and you can envision a day not too far down the road when many enterprise users will be using the combination of Google and SF.com services for 80 percent or more of their day-to-day business information generation and use. Throw in Google's Web and enterprise search services along with their robust and open development APIs and you can imagine more than a few of those SF.com venture dollars funding business information solutions that will make solutions like Factiva's SalesWorks look fairly limp by comparison.

While a stronger SF.com is in the interest of business information providers who want fast inroads into sales, marketing and management teams in enterprises this ally is beginning to recognize the gravitas that its platform-independent approach to business solutions has to provide leverage over these same vendors. As publishers thirsty for new revenue channels open up more to enabling access to premium content through Google search interfaces the combination of SF.com and Google could spell trouble for traditional licensed database services over the next few years. If SF.com and Google own the development and marketing environment and publishers no longer require traditional subscription services to leverage their content into enterprise applications then it is going to be a far more competitive environment for business information services providers who count on aggregated subscription services for their revenues.

There will be more good news than bad news for a while out of this impending alliance but business information services will be well-advised to sharpen up their strategies as to how to preserve and accelerate revenues through this alliance. Nimble competitors are likely to do quite well if they adjust quickly - but odds are strong that more than a few business information providers will stumble along the way.

Labels: Business Information, Deals Partnerships and Sales, Google, Salesforce.com, Trends

ZDNet reports on Salesforce.com's recent acquisition of Koral, a small content management company that focuses on bringing together unstructured content from enterprises into Salesforce.com's ASP-based sales management platform. Koral makes it easy for people to leverage SF.com's content synchronization capabilities to simplify the storage, sharing, searching and synchronization of office documents and emails - the very type of content that enterprise search engines and business information vendors are coveting increasingly for their own product plans. While SF.com enjoys support from many business information providers integrating subscription database content via its AppExchange online services store unstructured content offers another level of content value generation that trumps both I.T.-oriented office automation and search engine plays and publishers trying to define their own frameworks to organize user content as a business resource.

Business Information 3.0 is about creating value out of whatever content is available wherever it is made available - and creating more value in moments of fresh content discovered in time to make a difference to the top line of today's enterprises. Like Google Salesforce.com is approaching the content business from the perspective of a software-as-a-service vendor that make every business information resource accessible in a framework that makes an immediate and tangible difference to people's lives. Many publishers don't quite grasp the concept that any content that helps to move business processes forward is business information worthy of their attention - leaving huge opportunities for content technology vendors to define the framework in which they develop their services.

Today we see many vendors such as Hoover's, OneSource and Factiva integrating their business information into SF.com via AppExchange. With the Koral acquisition SF.com is laying down the gauntlet that challenges both publishers and I.T. companies to provide more combined content value than their highly cost-effective sales automation services. Increasingly this means mining content value from non-traditional sources such as corporate Web sites and delivering it as real-time updates to business information users. In the battle for business information desktops sometimes perhaps it pays to leave the desktop behind altogether...

Labels: Business Information, Deals Partnerships and Sales, Koral, Salesforce.com, Trends